Morgan Stanley is expanding its involvement in blockchain-based financial infrastructure, claiming a place among the first banks to adopt a new Wall Street system designed to tokenize U.S. stocks and Treasury securities.

The bank confirmed its participation in a post on X, linking its tokenization initiative to the October 28 introduction of the Depository Trust & Clearing Corporation’s (DTCC) Tokenization Service, or DTS. DTCC manages the clearing and settlement process for the majority of U.S. stock and bond trades.

Amy Oldenburg, Morgan Stanley’s head of digital assets strategy, said the bank’s early participation would help shape its next steps in the digital asset sector.

She explained that gaining direct experience with blockchain-based securities while connecting them to traditional financial market infrastructure would provide valuable insights for strengthening the firm’s digital asset capabilities as the market matures.

Through tokenization, traditional financial assets are represented as digital tokens on blockchain networks. This approach allows eligible securities to move between digital wallets and financial platforms while potentially supporting round-the-clock transfers and trading.

Under DTCC’s new service, its Depository Trust Company (DTC) creates tokens representing securities already held in custody. DTCC says these digital representations preserve the same ownership rights and investor protections as the original securities. Investors can convert between traditional and tokenized versions and transfer the tokens to their personal digital wallets.

DTCC believes the system could bring several improvements to financial markets, including greater liquidity, easier collateral transfers and more efficient use of capital.

The service currently operates on Canton and DTCC’s private Besu blockchain network. Further blockchain integrations are expected to follow in 2027.

The project received clearance from the Securities and Exchange Commission through a no-action letter issued in December 2025. Its initial coverage includes Russell 1000 companies, ETFs tracking major stock indexes and U.S. Treasury securities.

Around 20 financial institutions have registered to participate, including Morgan Stanley, J.P. Morgan, Citi, Bank of America, Fidelity and Citadel Securities.

CoinDesk requested further comments from Morgan Stanley about its participation but had not received a response at the time of publication.